Key Takeaways
- SWIFT CIO has called out Ripple’s centralization and dependence on other chains.
- The scathing comments came amid Swift’s blockchain trials using Ripple’s XRPL.
- Ripple, the blockchain payment giant, is eyeing to capture the traditional payment market.
Ripple, the blockchain payment processing giant, is eyeing a piece in the global payment network, which is currently dominated by SWIFT, the global messaging network underpinning the world’s interbank transfers.
Although both firms are currently working together, as SWIFT started its blockchain trial with Ripple’s XRP Ledger, this has not stopped the SWIFT Chief Innovation Officer from criticizing XRP’s centralization.
SWIFT Exec Calls Out Ripple’s Centralization
SWIFT’s chief innovation officer, Tom Zschach, didn’t hesitate to point out Ripple’s control over XRP and its resilience over other chains.
In a LinkedIn post, Zschach discussed the significant shift in finance and how, by 2025, public blockchains will be too big to be ignored by financial institutions.
Zschach noted that Ripple wasn’t facing regulatory scrutiny but a regular lawsuit.
“Institutions don’t want to live on a competitor’s rails. Compliance isn’t about one company convincing regulators that it should be allowed to operate. It’s about an entire industry agreeing on shared standards that no single balance sheet controls,” he added.
SWIFT Takes Blockchain Route
SWIFT’s comments about blockchain use cases in the traditional financial system are not just on social media; SWIFT is currently running multiple blockchain-based trials to integrate a decentralized solution for its payment network.
SWIFT has ruled the traditional banking networks for a decade, and now aims to leverage blockchain-based instant transactions at a fraction of the cost to carry on its conventional financial legacy.
Although SWIFT has been experimenting with blockchain technology since 2016, this year marks its first significant move into payment integration, its core business.
The firm started blockchain trials in August, with transaction testing on Hedera Hashgraph and Ripple’s XRP Ledger, to review whether blockchain-based solutions could coexist with traditional banking systems.
ISO 20222 Key to SWIFT Blockchain Adoption
SWIFT’s shift to the ISO 20022 messaging standard is critical for its blockchain integration. This standard enables richer data and better integration with digital asset networks. This standard supports XRP’s fast settlement and low-cost features, making it suitable for cross-border payments.
ISO 20022 is a global standard for financial messaging developed by the International Organization for Standardization (ISO). It provides a structured, data-rich format for exchanging financial information between institutions.
SWIFT began migrating to ISO 20022 for cross-border payments and reporting in November 2022 and is expected to complete the network migration to the new standard by the end of 2025.
ISO 20022 could play a pivotal role in SWIFT’s blockchain trials and projects by enabling seamless integration of traditional financial systems with blockchain-based digital assets.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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